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Thursday, 21 August 2014

On August 18, lingerie and accessories company Zephyrs filed a suit in New York Supreme Court (a court of first instance) against its former patent attorney Bernard Codd and his law firm McDermott, Will & Emery, claiming that their “deficient services “while drafting a bra insert patent now prevents Zephyrs to sue competitors selling similar products on the market and to collect royalties. The case is Runberg, Inc. d/b/a Zephyrs v. McDermott, Will & Emery LLP and Bernard P. Codd.

This Kat was confused as to where the kidney-shaped insert should go.

Debra MacKinnon is Zephyrs’ principal and the inventor of a kidney-shaped insert for women’s bras, which is “anatomically designed to conform to and push up the breasts, thereby increasing volume and cleavage, while providing a natural shape.” In March 2008, the company engaged the law firm McDermott, Will & Emery to file a patent and U.S. Patent No. 8,216,021 B1 (the Patent) was issued on July 10, 2012.

According to the complaint, Mr. Codd advised his client “that the best available alternative to describe the Invention in the formal patent application would be through the use of defined “ratios.”“

Victoria’s Secret has been selling for more than a decade “at least $120 million worth” of Zephyrs’ insert under a sourcing contract. This business relationship went sour in 2012 and Zephyrs filed a suit against Victoria’s Secret, claiming the lingerie retailer intentionally breached the agreement. Litigation was eventually dismissed by both parties with prejudice. The August 18 complaint alleges that Victoria’s Secret has been selling knock-offs of Zephyrs’ bra inserts since then without paying any royalties. Plaintiff estimates its lost royalties to exceeds $4,900,000. Amazon sells a similar product, Envy, on its website, and Zephyrs estimates it lost $1,000,000 in royalties.

This is the stuff dreams are made of.

When Zephyrs discovered that products similar to the one it had patented where sold, it consulted an attorney to file an infringement suit and discovered then that the Patent was defective. Ms. MacKinnon consulted with an independent patent counsel in April 2014 who pointed out what he believed was “substantial errors” in the patent when it describes the ratio of maximum thickness between the first main surface of the insert and its second main surface, and the ratio of a depth of the notch from a straight line connecting the first lobe of the insert and its second lobe along the top side of the bra insert.

Plaintiff claims that these ratios and limitations were “fundamentally incorrectly drafted” and, as such, did not correctly describe the invention which is accurately depicted in the diagrams of the patent application.

Plaintiff then hired another law firm to file a reissue application on its behalf, which is now pending before the USPTO. However, the complaint states that several claims in the Patent were “so fundamentally flawed, that they must be cancelled by the USPTO.”

The complaint states that even as Amazon and Victoria’s are selling similar inserts, Zephyrs cannot sue them as its Patent is defective. The reissue process does not permit “to sue under or assert the original, damaged patent from the date that infringement began until a reissue application is granted.”
Even if the Patent is indeed reissued, the complaint points out that the companies selling products similar to the Zephyrs’ insert during this blackout period “may possess a statutory and equitable defense of “intervening rights” to the Reissued Patent. In other words, if a third party begins manufacturing or selling products that incorporate the Invention now (as many already have), they are permitted to keep selling such products even if they would infringe upon a Reissued Patent that is later granted and issued.”

Zephyrs is seeking damages and costs.

A warm Katpat to Chris Torrero who told the IPKat about this case. Thank you Chris!

11 comments:

Victoria’s Secret has been selling for more than a decade “at least $120 million worth” of Zephyrs’ insert under a sourcing contract.

What exactly has been sold for "more than a decade", i.e., since at least before 2004?

If the application filed in 2008 was drafted to cover these previously marketed products, the plaintiffs might be in for a rude surprise if they hadn't been told of 35 USC 102(b) sales bar by their attorney...

The reissue application 14/327,362 isn't visible in PAIR. If it were an European application, from the description, I guess it would get clobbered with Art. 123(2) EPC. But 35 USC 112 isn't quite the same animal.

As I read claim 1, it says that the ratio of the thickness of the insert to the width is less than 9. So if claim 1 is valid, all is sweet: less than 9 includes less than 1. Most of the dependent claims, on the other hand, would have problems. But without reading the whole patent and the complaint, and neither of the two papers reporting the story have a link to the complaint, who knows what's going on.Roufosse: (1) According to the NY Daily News (though not reported in the Post or ABA Journal Daily Newsletter, which also have the story), although Zephyr had done substantial business with Victoria's Secret over time, the inserts were only on sale for a year before the relationship went south in 2012, so there probably aren't 102(b) issues. I think if there were, we wouldn't be worrying about insert dimensions. (2) I expect the reissue will show up shortly - it's theoretically immediately public since the patent itself is public, but it may just take a little while for the PTO to get things straightened out for access.

I found the case documents (10 items) on the NY supreme court's online library iScroll.

After solving the CAPTCHA challenge, go to the search mask, and enter " 652543-2014 " in the "INDEX NUMBER SEARCH" field.

This case cannot be located through the index (yet), I only found it in the list of the most recent additions.

The reissue application is included as document #6. It's not as bad as I thought, this is more like the correction of an obvious error than a redraft. What leads them to think they have no chance whatsoever of enforcing their original patent? Shouldn't they at least try before they drag the original attorney in the defendant's box?

And what if the original and/or reissue patent is found invalid in the end?

The amendment sought runs in the lines of:

wherein a ratio of [DELETED: a maximum thickness between the first main surface and the second main surface to] a maximum length between opposing ends of the first lobe and second lobe [INSERTED: to a maximum thickness between the first main surface and the second mainsurface is less than about 9,

As a patent attorney, but not a litigator, having now read both the patent and litigation files, I find this hard to understand.

I accept that it's very likely that there is an error in the patent and that claim 1, for example, should refer to width/thickness (W/T) ratio and not T/W. That makes claim 1 more "sensible" in that W/T is expected to be greater than 1, unless a truly ridiculous push-up is intended; and it fits with, say, claim 2, which specifies T/W of 2-8 and would make a lot more sense with W/T of 2-8.

BUT:1. There's nothing in the litigation file to suggest that Zephyr has made any attempt to enforce the patent, far less that they have tried and failed because the claims don't cover the Victoria's Secret and Amazon inserts. It seems to me that unless Zephyr has tried and failed to enforce the patent, it is premature to claim that there are any damages attributable to the screwup. This is not my field of law, but I don't see how a useful (monetarily valuable) claim of malpractice can be made merely because the patent doesn't contain the desired claim. Perhaps someone more knowledgeable can enlighten us. While it seems that the patent is screwed up, I still think that claim 1, if valid, has an effective scope that includes the reissue claim 1 scope. That is, if T/W is less than 9, it may also be less than 1; said another way, if T/W is less than 9, W/T can be greater than 1 as is presumably intended.2. I have reservations about the reissue application. I understand the intent - it was all a horrid mistake to put T/W instead of W/T - but to attempt to correct it in the way that has been done so far strikes me as problematic. Suppose the reissue were to issue as filed, and the new claim 1 were valid - and the first strikes me as a big "suppose" because at a quick glance I didn't see an antecedent for W/T<9 in the application other than the drawing (which equally supports T/W<9), and none was mentioned in the reissue papers in the litigation file - then the reissue patent lacks an original claim 1 and has only a reissue claim 1, which is different; so there are intervening rights for all sales that precede the reissue grant. I see the difficulty of trying just to add a claim to W/T<9 without making all the changes - how do you justify it? (though I think that problem doesn't go away just by altering the specification to conform to the new desired claim) - but this is pushing the original patent under the bus in hopes of a reissue instead of trying to patch it somehow. Of course, if the reissue application is rejected, it can be abandoned and the original patent remains in force, but I'm a little queasy about the tactics so far. Again, perhaps someone can enlighten us.It will be interesting to see what McDermott et al. have to say.

I note that the application for the original patent claims priority to a provisional filed in 2008, which (at a quick glance) has no ratios - but wasn't incorporated by reference, was filed by McDermott, and was mentioned only in passing in the complaint.As the National Enquirer used to say: "Enquiring minds want to know."

Sorry for the delay in reply - I thought I had submitted a reply yesterday morning, but it seems it did not go through (too long).

Here's my take on the difference between a claim to priority and incorporation by reference.

A claim to priority relates to a previously filed patent application of the same or a related inventive entity. It has the effect that, if a claim in the later application could have been made/had support in the priority application, then an intervening reference is not an effective reference against that claim. As far as I know, the US operates the same as other countries on this.In the US, a claim to priority must be made in the application itself (though can be introduced by amendment after filing, as long as done timely), and usually appears in the application data sheet.

Incorporation by reference is available only (as far as I know) in the US - for example, I have been instructed to strike "incorporation by reference" statements from my US-originating PCT applications when in the EP regional phase. It relates to any earlier publication of any entity or previously filed unpublished patent application of the same or a related inventive entity, so that it includes much more than those applications from which priority may be claimed. It has the effect that the material incorporated by reference is effective as if it were explicitly written in the application. Incorporation by reference in this way requires "magic words" to be effective - the term "incorporated by reference" or some close variant is required; and you can't add an incorporation by reference by post-filing amendment as that would raise the possibility of introducing new matter.

An applicant may not rely on the disclosure of a priority document to support correction of an error in the later application "because a claim for priority is simply a claim for the benefit of an earlier filing date for subject matter that is common to two or more applications, and does not serve to incorporate the content of the priority document in the application in which the claim for priority is made." But for applications filed on or after September 21, 2004, where all or a portion of the specification or drawing(s) is inadvertently omitted from the U.S. application, a claim for priority of a prior-filed application that is present on the filing date of the application is considered an incorporation by reference of the prior-filed foreign application as to the inadvertently omitted portion of the specification or drawing(s).

A common use of incorporation by reference is to shorten an application by omitting conventional material, yet retaining the ability to insert that conventional material if completeness of disclosure is challenged during examination. So, I might say in a chemical application that the invention includes compound X "and its pharmaceutically acceptable salts", while adding a reference to a book or article on pharmaceutically acceptable salts and incorporating it by reference so that I don't have to give a page-long list of exemplary salts and how to make them. Of course good practice (and the assumption of non-US filing) mandates completeness of disclosure, but incorporation by reference is a backstop. My practice, and I think that of many US patent attorneys, is to incorporate by reference anything mentioned in the application - including any priority applications - just in case.

So explicit incorporation by reference is broader than and potentially offers considerable advantage over just a claim to priority. There are subtleties of course, but I think I've said enough.

So as I understand it, the priority claim is merely a timing mechanism for what is explicitly in the nonprovisional, while the incorporate by reference opens the door to augment the nonprovisional with any "tidbit" that may have been left out crafting the nonprovisional (and assuming that that nonprovisional uses the provisional as its starting point).

From a litigator's perspective, it seems to me like the central issue is that the original patent is seriously compromised because of the prosecutor's drafting error. Why should a patent owner be forced to litigate against an infringer under a compromised patent to prove actual damages first?

If the Claim 1 claim was seriously compromised and the dependent claims totally botched, any patent litigator would tell the patent owner to seek a reissue to salvage the patent, but in the interim, the patent cannot be enforced against anyone.

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